This report is the third in a series of measure reports that examine the economic, civic, and social development of the state by its systems of higher education. This report measures degrees awarded in selected areas of employment against workforce demand. The report found: (1) California's postsecondary schools are not producing enough graduates with baccalaureate degrees to meet a growing demand by employers of workers with computer-related professional skills; (2) Overall there appears to be enough engineering degree graduates, but an increase in bachelor's degree level learners might help employers meet the need for entry-level workers; (3) State efforts to expand the number of college educated nurses, doctors and other health professionals appear to be helping to relieve shortages in these occupations, but California needs to maintain its commitment to such initiatives in order to avoid future labor shortages as the demand continues to grow for healthcare workers; (4) Workforce projections for attorneys suggest that the state's current capacity to train lawyers is adequate; and (5) California continues to face serious shortages of fully qualified teachers. K-12 schools with the neediest students often lack the resources or incentives to attract fully qualified teachers, undercutting the ability of California to provide an adequate education to all students. Based on this assessment, the Commission concludes that California's postsecondary education system is not producing enough graduates to meet the State's economic needs. California's employers are forced to import college graduates and pay inflated wage premiums in order to attract and retain the college educated workforce they need. The Commission sees a need to continue and strengthen efforts to expand degree earning in several occupational fields including: computer-related jobs; engineering professions; nursing and other health-related professions; and teaching. The Commission believes greater emphasis should be placed on tracking occupational outcomes for students and supports linking student data-bases with employment-wage data maintained by the state and federal government. (Contains 10 footnotes and 4 figures.)